Name the 4 competitive strategies by Porter
- Cost leadership (ability to design, produce and market a comparable product more efficiently than competitors)
- Differentiation (ability to provide unique and superior value to the buyer in terms of product quality, special features or after-sales service)
- Broad target (Aim at the middle of the mass market)
- Narrow target (Aim at a market niche)
What happens if you don’t achieve 1 of 4 strategies by Porter?
- You’re stuck in the middle, no competitive advantage.
2. Below-average financial performance
What does the service quality-productivity profit triangle do and consist of?
It consists of:
- Service quality
- Productivity
- Profit
If one goes up, the others go as well. This works the same way if it goes down.
The dimensions of customer loyalty.
What happens if you have a positive buying pattern + a positive attitude?
A true loyal customer
How much more does it cost to gain new customers instead of keeping the current ones satisfied?
Up to 5x
How many customers does an average company lose per year?
10%
Name the 3 parts of the wheel of loyalty
- Build a foundation for loyalty
Deliver quality service
Manage the customer base via effective tiering of service
Segment the market to match customer needs
- Create loyalty bonds
Give loyalty rewards
Deepen the relationship via bonding
3 Reduce churn drivers (people who stop buying)
Put effective complaint handling
Monitor churning customers
Name the 7 P’s of marketing
- Product/service
- Price
- Promotion
- Place
- Physical environment
- Process
- People
Of which 3 components consist ‘Product/Service’?
- Core product = What the customer is fundamentally buying
- Supplementary services = Important for differentiation
- Delivery processes = How is it delivered to the customer?
How can you manage capacity in the ‘Process’ stage?
- E.g. use part-time employees
- Design capacity to be flexible
- Invite customers to-do self-service
How can you manage demand in the ‘Process’ stage?
Insufficient capacity:
- Raise prices
- Queing system
Insufficient demand:
- Lower prices
- Promotion
- Reward employees
- Reward loyal customers
When does waiting feel longer?
- Unoccupied time
- Unfamiliar waits
- Uncertain waits
What is the cost of waiting?
Relationship between: waiting time, customer satisfaction and return behavior.
E.g.: Each minute a customer has to wait, costs $18
What is the cost of additional capacity?
Adding more personnel paid at e.g. $7.50/hour
What are the question asked for when placing a service in the ‘Place’ stage?
- What - What flows through the channels?
- How - How should a service reach a customer?
- Where - Where should a service be delivered?
- When - When should services be delivered?
What are intermediaries?
People between services and customers.
E.g. A hotel that uses a booking site to reach people
What does the Service Talent Cycle consist of?
- Hire the right people
- Enable your people (training team, make good teams)
- Motivatie & energize your people
What is an empowerment approach?
- Simplified tasks
- Clear division of labor
- Little decision-making discretion
- Splitting up the tasks like in a factory-like process
What are the pros of empowerment?
- It can involve quicker online responses to customer demands during service delivery or when problems arise.
- It can lead to higher levels of employee satisfaction, a better quality of customer interaction and higher levels of commitment.
This all results in employee involvement, quality improvement, and innovation.
What are the cons of empowerment?
- It requires greater investments in selection and training, resulting in higher labor costs.
- It can lead to customers’ impressions of not being treated correctly (because they are being treated in a non-standardized way).
- It implies the risks of ‘give-aways’ and bad decisions by frontline employees.
What is the Servicescape model (developed by Bloom and Bitner) in the ‘Physical Environment’ stage?
It’s developed to emphasize and understand the impact of the physical environment in which a service process takes place.
E.g. the physical environment of a retail store for a customer.
What are ambient conditions?
Observable stimuli such as:
Air temperature
Lightning
Noise
Music
It influences consumers their behavior.
E.g.: Using uptempo music causes a faster traffic flow in a retail store.
What is the meaning of approach within the Servicescape model?
It refers to how customers use the space, during and after the service encounter.
What is a moderator in the ‘Physical Environment’ stage?
Any variable with the potential to change the relationship between a dependent, and an independent variable.
Moderating variables describe what effects will hold in certain conditions.
